In 2010, the Sykes Company wrote off a $100, 000 debt from a major customer, lost $1, 250, 000 when a foreign country devalued its currency, gained $2, 000, 000 when a manufacturing plant was destroyed by a flood, lost $500, 000 on the early retirement of its long-term bonds, and lost $75, 000 on the sale of stock from its investment portfolio.What amount of extraordinary items (before income taxes)will Sykes report in 2010?
A)$ 250, 000
B)$ 175, 000
C)$2, 000, 000
D)$1, 425, 000

Question

Quizplus · Accepted Answer

Extraordinary items are events that are both unusual and infrequent. In this case, the $2,000,000 gain from the destruction of a manufacturing plant by a flood qualifies as an extraordinary item.

In 2010, the Sykes Company Wrote Off a $100, 000